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City Council

City Council Meeting Minutes

October 15, 2012


1.         Roll Call

Mayor Roe called to order the Roseville City Council regular meeting at approximately 6:00 pm. and welcomed everyone. (Voting and Seating Order: McGehee; Pust; Johnson; Willmus; and Roe).  City Attorney Mark Gaughan was also present. 


2.         Approve Agenda

Councilmember McGehee and Mayor Roe requested removal of Consent Agenda Item 7.i; entitled, “Approve a Memorandum of Understanding (MOU) between the Roseville Housing and Redevelopment Authority (RHRA) and the City of Roseville regarding the Sale of the Dale Street Fire Station Property to the RHRA.”


McGehee moved, Willmus seconded, approval of the agenda as amended.


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.       

            Nays: None.


          Interviews for Human Rights Commission

Mayor Roe, Councilmembers and Human Rights Commission (HRC) Chair Gary Grefenberg interviewed three candidates: Brian Wiger; Linda Hartz Rump; and Scot Becker for a vacancy on the HRC.


3.         Public Comment

Mayor Roe called for public comment by members of the audience on any non-agenda items. 


a.            Gary Grefenberg, HRC Chair

HRC Chair Gary Grefenberg announced an upcoming panel discussion on Wednesday, October 17, 2012 at 7:00 pm at the City Hall Council Chambers with the State Commissioner of Human Rights, Steven Lindsay, regarding potential impacts if either or both of the proposed constitutional amendments post the November General Election.


4.            Council Communications, Reports, Announcements and Housing and Redevelopment Authority (HRA) Report

Mayor Roe announced an opportunity for Roseville residents at an upcoming Wellness Fair at Roseville City Hall on Thursday, October 18, 2012 from 4:30 to 7:00 pm.  At the Fair, residents will be able to receive flu shots as well as have blood pressure, hearing and eye tests.  Mayor roe advised that most health insurance will be accepted, with health insurance cards presented; and costs for those not having insurance would be $29 for a flu shot or $32 for flu mist; with checks or cash only accepted, no credit cards.


Councilmember McGehee noted there were two versions of the shots: a more potent “over 65” version; and another less potent version and cautioned residents to seek advice from their providers as to which version they should receive if they didn’t need the “stronger” version.


5.         Recognitions, Donations, Communications


6.         Approve Minutes

Comments and corrections to draft minutes had been submitted by the City Council prior to tonight’s meeting and those revisions were incorporated into the draft presented in the Council packet.


a.            Approve Minutes of October 8, 2012 Meeting

McGehee moved, Pust seconded, approval of the minutes of the October 8, 2012 meeting as submitted.


Roll Call

            Ayes: McGehee; Pust; Willmus; and Roe.  

            Nays: None.

            Abstentions: Johnson.

            Motion carried.


  1. Approve Consent Agenda

There were no additional changes to the Consent Agenda than those previously noted.  At the request of Mayor Roe, City Manager Malinen briefly reviewed those items being considered under the Consent Agenda.


a.            Approve Payments

Johnson moved, Pust McGehee, approval of the following claims and payments as presented.

ACH Payments







Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


b.            Approve Business & Other Licenses & Permits

Johnson moved, McGehee seconded, approval of license applications for the following applicants:



Type of License

Friends of the Oval Foundation; 2661 Civic Center Drive

One—Time Gambling Permit


Ace Solid Waste, Inc.; 6601 McKinley Street NW

Ramsey, MN

Solid Waste Hauler License


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


c.            Approve General Purchases and Sale of Surplus Items in Excess of $5,000.

Johnson moved, McGehee seconded, approval of the following purchases and/or contracts for service:






Community Development

Nelson Auto

New Inspections Vehicle (to replace 2001 Ford Taurus)



Freelance Professionals Inc.

Seasonal Labor for 2012 Leaf

Pickup Program



North American Salt Co.

Road salt per MN Sate Bid Contract



Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


Johnson moved, Pust seconded, approval of the following sale of surplus vehicles and/or equipment:



Item / Description


Community Development

Sell 2001 Ford Taurus

Estimate $2,400.00


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


d.            Accept Roseville Area High School Police Liaison Officer Agreement for the 2012-2013 School Year

Johnson moved, McGehee seconded, approval of the 2012-2013 Roseville Area School Police Liaison Officer Agreement (Attachment A); and authorizing the Mayor and City Manager to execute the document.


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


e.            Set November 14, 2012, for a Special Meeting to Canvass Election Results

Johnson moved, McGehee seconded, scheduling a Special Meeting for Wednesday, November 14, 2012 at 12:00 p.m. to canvass Municipal General Election results.


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


f.             Adopt Multi-Agency Law Enforcement Agreement – Minnesota Internet Crimes Against Children Task Force (MICAC)

Johnson moved, McGehee seconded, adoption of Resolution No. 11016 (Attachment A) entitled, “City of Roseville Participation in the Minnesota Internet Crimes Against Children Task Force Program (MICAC);” entering into the Multi-Agency Law Enforcement Joint Powers Agreement with the Minnesota Bureau of Criminal Apprehension ((Attachment B).


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


g.            Adopt PERA Resolution for Part-Tim Firefighters

Johnson moved, McGehee seconded, adoption of Resolution No. 11017 (Attachment A) entitled, “Part-Time Firefighter PERA Declaration;” accepting the following as members of the Public Employees Police and Fire Plan effective the date of the employee’s initial Police and Fire Plan salary deduction by the City of Roseville: David Doucot; Tom Fehrenbach; John Huber; Thomas Alexander; Gretchen Johnson; Jody Kelting; Nick Krueger; Tom Liberkowski; Tom Martinez; Patrick McKee; Erin Stone; and Peter Tierney.


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


h.            Authorize Metropolitan Council Environmental Services Municipal Inflow and Infiltration Grant Application

Johnson moved, McGehee seconded, adoption of Resolution No. 11018 (Attachment A) entitled, “Resolution Supporting Application for Metropolitan Council Environmental Services Municipal Infiltration/Inflow Grant;” for improvements to the City’s sanitary sewer infrastructure.


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


  1. Consider Items Removed from Consent


i.             Approve a Memorandum of Understanding (MOU) between the Roseville Housing and Redevelopment Authority (RHRA) and the City of Roseville regarding the sale of the Dale Street Fire Station Property to the RHRA

At the request of Mayor Roe, City Manager Malinen briefly summarized provisions of the Memorandum of Understanding (MOU) (Attachment A), as detailed in the Request for Council Action (RCA) dated October 15, 2012.


Councilmember McGehee referenced Section B.4 (line 27-29) of the MOU regarding rezoning; and expressed her concern in rezoning the property that high of a designation when it was adjacent to lower density residential properties.  Councilmember McGehee noted that Councilmember Willmus had alluded to similar concerns in previous discussions at the joint meeting of the HRA and City Council; and while seeking to make a statement with this development project in Roseville, Councilmember McGehee felt the City Council should not commit to rezoning in advance of seeing the development plans or hearing from adjacent residents as to their preferences.  Councilmember McGehee suggested that language be revised to state that the parcel would be rezoned in conformance with an agreed-upon plan coming forward to the City Council following negotiations with residents and the HRA, rather than rezoning the entire area for HDR-1 at this time, since that seemed to be a very broad and intense use of the land, and not her recollection of previous discussions.


HRA Executive Director Patrick Trudgeon advised that the language, as written, states “… up to” HDR-1, noting that there was an even higher zoning designation, HDR-2, but that was not being recommended recognizing the lower densities adjacent to the parcels.  Mr. Trudgeon clarified that this MOU was specific to the fire station property only, rezoning it from its current Institutional (I) zoning to the HDR-1, and as stated was for “up to” HDR-1 and remained flexible at this time.  Mr. Trudgeon further clarified that the ultimate zoning would be up to the City Council once guidance and plans had been determined.  Mr. Trudgeon advised that staff thought it was appropriate to highlight in the MOU; realizing and reiterating that it was ultimately up to the City Council at a later date.


Councilmember McGehee noted that the fire station parcel was on the corner, with single-family residential across the side street as well as at the rear of the parcel, with vacant lots behind the other lots.  Councilmember McGehee concurred that the language was sufficient as written as long as it would come back to the City Council again; opining that she did not like to make a commitment to the HDR-1 zoning at this time.


On another note, Councilmember McGehee noted the need for the City Council to be alert to the use of union and non-union workers for any future construction projects to avoid similar issues as those being experienced with construction of the new fire station.  If partnering with a private developer, Councilmember McGehee suggested that any municipal contracts should stipulate a certain percentage of union and non-union workers.  While Councilmember McGehee admitted that this was an entirely separate issue, and not necessarily applicable to the MOU, she noted the need to bring it to the City Council’s attention at this time, since the City and HRA were entering into a new role with this proposed redevelopment project.


Mayor Roe duly noted that City Manager Malinen had taken note of this union-related discussion for future reference.


Councilmember Willmus clarified that his concern with HDR zoning was for the fire station site only; and the need to create a buffer for those single-family lots adjacent to residential lots.  If the neighborhood raised such concerns in the future, Councilmember Willmus noted that this would raise a flag for him.


Mr. Trudgeon recognized the concerns; noting that, in this instance, the City Council remained in control of the redevelopment as a development partner with the HRA and the neighborhood, and clarified that the HRA would not be making any land use decision through execution of this MOU with the City.  Mr. Trudgeon advised that he anticipated significant engagement and interaction with the neighborhood and among all parties during this process.  Mr. Trudgeon further noted that the term of this MOU was through 2017, and that there would a lot of time to address issues as the process moved forward.


Mayor Roe noted a correction on page 1 of the MOU (lines 41-42) suggesting striking language in the parentheses “…(the cost of which is offset against the purchase price, as described above);” as this was addressed in Item B-.1 (lines 19-22).


McGehee moved, Johnson seconded, approval of a Memorandum of Understanding (Attachment A) between the City of Roseville and the Roseville Housing and Redevelopment Authority (RHRA); regarding the sale of the Dale Street Fire Station located at 2335 Dale Street to the RHRA; as amended with Item C.3 to read as follows: “The RHRA will undertake environmental review and remediation of the Property, including conducting a Phase I and Phase II environmental review as necessary; a Hazardous Building Assessment and resulting remediation as determined by the studies.”


Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


12.         General Ordinances for Adoption


13.         Presentations


14.         Public Hearings


15.         Business Items (Action Items)


a.    Approve LHB Consulting as Lead Consultant for the Park and Recreation Renewal Program

Parks and Recreation Director Lonnie Brokke and Parks Superintendent Jeff Evenson highlighted the RCA dated October 15, 2012; for approval of LHB Consulting as lead consultant for the Park and Recreation Renewal Program.


Mr. Brokke reviewed the recent interview process and six (6) selection criteria.


At the request of Mayor Roe, Mr. Brokke described the scope of services provided in this consulting activity and how it related to staff involvement and teamwork in the process.


          Mr. Brokke assured that the consultant would be tasked with coordinating planning efforts with the community and staff, recognizing other amenities and working with agencies (e.g. watershed districts); and advising how best to package upcoming Requests for Proposals (RFP’s) to gain the greatest efficiencies throughout the process.  Mr. Brokke advised that it was the intent to continue the process similar to the successful Master Plan process, with even more refined engagement of neighborhoods as projects developed that would impact them.  Mr. Brokke noted that this would take the City to the next level of design work and that the consultant would develop consistent and appropriate construction and design standards for each item (e.g. features and maintenance efficiencies); and assist with other sub-consultants (e.g. natural resources consultant) to assure that consistency continued to flow through the adopted Master Plan, updating it along the way as indicated.


          Mayor Roe asked for clarification as to why a consultant was recommended versus using in-house staff and resources.


          Mr. Brokke advised that the specific disciplines needed for design, civil and mechanical engineering, and landscaping were not all available in-house to the level needed.


          Councilmember McGehee questioned the value of the consultant allotting up to two (2) days per month at City Hall or other sites for meetings, and why those meetings couldn’t be facilitated by staff.


          Mr. Brokke clarified that this was the value piece to provide a regular and consistent discussion of concerns (e.g. if community group recommendations and projects needed further refinement) based on the expertise of the consultant; and was separated intentionally from the base contract itself as noted in the RCA.


          Discussion ensued regarding flexibility of the meeting times/days at the discretion of City staff and the community groups; not-to-exceed amount of hours depending on the length of time needed for the design work and program plan to be fully developed and refined; and significant interest of Roseville citizens in participating in the planning process itself.


          Councilmember McGehee suggested adding a full-time staff person in-house for the four (4) year duration of this project; questioning if this would provide any cost savings with Mr. Evenson overseeing the finer details of the design standards.


          Mr. Brokke advised that he and City Manager Malinen had discussed this at a staff level; however, it was their intent given current workloads and potential future employee needs for maintenance and other deliverables, it had been the consensus that it would be more cost-effective to use Mr. Evenson’s landscape design expertise to oversee the projects and forego a construction manager, since allocating his time upfront appeared to be more beneficial.  Mr. Brokke noted that this would allow for use of the consultant’s expertise upfront and then allow staff to manage the project through to the end for those construction projects; and through thinking the process through in the beginning would provide for less monitoring time needed by staff and allow the contractors to think through the projects more efficiently.


          Further discussion included the four (4) year process and shifting projects into alternate years due to the later than anticipated start time; recognizing the expertise and level of in-house expertise; reliance on Arizona State for the Best Value Procurement Method once designs and plans/specifications had been completed; clarification that this consultant was not intended for the construction process itself; City hiring of contractors for specific projects with staff oversight versus a construction manager/consultant; and clarification that bond funds could not be used for staffing.


          Mayor Roe noted the need to rely on input from City management staff for future, long-term staffing as projects develop may be more prudent than attempting a more specific, short-term hire at this time.


          Mr. Brokke expressed appreciation that Mayor Roe recognized that future need, noting that he and City Manager Malinen continued with ongoing discussions on that potential need; and suggested that if any savings were realized from the 2012 budget, that savings was intended to be allotted for hiring part-time staff to take on some of the responsibilities currently being undertaken by more senior staff, and provide more flexibility as needs developed.


          Councilmember McGehee opined that, from a management perspective, she thought those issues would be worked out during the design stages; noting that the current Capital Improvement Program (CIP) may not sufficiently address ongoing maintenance needs in the future.  Councilmember McGehee further opined that an employee could be trained in on the process and coordinate activities with Mr. Evenson in conjunction with Arizona State, allowing for one additional person as the keeper of design standards for the projects.  Councilmember McGehee opined that this was a new day for the Parks and Recreation Department moving forward in setting standards and branding goals over the next few years, and work would continue to escalate.  Councilmember McGehee further opined that this responsibility should not be relegated to only a few available people; and while recognizing that Mr. Evenson brought his historical and technical expertise to the table, it would be advantageous to have someone with complementary skills to his.  Councilmember McGehee opined that such a major project should not rely on a consultant, but be supported by in-house staff.


          Mayor Roe advised that staff could certainly take Councilmember McGehee’s recommendations under advisement; noting that the entire process was evolving, as well as the Public Works Asset Management Software Program and applicable staffing and the expertise and management controls that would provide city-wide.


          Councilmember Willmus expressed his appreciation for Councilmember McGehee’s observations and comments; suggesting that the discussion certainly may come forward down the road.  Councilmember Willmus further recognized the response of Mr. Brokke for his and City Manager Malinen’s consideration and background analysis of value of in-house staff versus consultants at this time.  Councilmember Willmus spoke in support of staff’s recommendation, opining that it appeared to be the best route indicated at this time.


          Councilmember Johnson echoed the remarks of Councilmember Willmus; and recognized the comments of Councilmember McGehee about future staff needs.  However, Councilmember Johnson opined that now was not the time for that evaluation beyond that already done by staff prior to this recommendation.  With a new City Council in place in the future, Councilmember Johnson opined that this would be sufficient time to address those needs.  Councilmember Johnson recognized the complexities of upfront planning, and spoke in support of staff’s recommendation to seek outside consultation as the most cost-effective approach to utilize expertise for that planning.  Councilmember Johnson concurred that the design work and planning necessary for implementation required a vast amount of work to be done; and expressed his confidence in having expert advice available moving forward; and reiterated his support of the recommendation.


          Along those lines, Councilmember McGehee, echoed Councilmembers Johnson and Willmus; agreeing that upfront planning was the most critical piece.  However, Councilmember McGehee asked that, once that was done, staff would not rush to get things done, but do the projects in a logical, orderly fashion, with some flexibility; with the key need being to have a good plan in place over the next nine (9) months.


          McGehee moved, Johnson seconded, approval of entering into a professional services agreement with LHB Consulting for services as detailed in the pre-award document (Attachment A) to assist in leading the Park and Recreation Renewal Program as outlined, at a cost not to exceed $194,418 ($172,338 base and $22,080 for value added item community interaction item); with funds to be taken from the Park and Recreation Renewal Program Budget; authorizing the Mayor and City Manager to execute the documents, contingent upon final review and approval by the City Attorney.


          Mayor Roe opined that it made sense to use experts available for this planning, while allowing in-house staff to continue offering programming and maintaining facilities over the next four (4) years.


          Councilmember McGehee, from her perspective, opined that she also wished the many City departments retain their broad range of management for services, vehicles, expertise, and facilities during the process and not shortchanging them during that time.

Roll Call

            Ayes: McGehee; Pust; Johnson; Willmus; and Roe.        

            Nays: None.


Mayor Roe recessed the meeting at approximately 7:38 pm and reconvened at approximately 7:44 pm.


13.      Business Items – Presentations / Discussions


            a.         Budget Discussion

Mayor Roe recognized Finance Director Chris Miller, who provided a summary of discussions to-date specific to the City Council-adopted 2013 Preliminary Tax Levy and Budget.  With that Preliminary 2013 Tax Levy at $17,319,826, an increase of $2,357,532 or 15.8% from 2011, Mr. Miller advised that the increase was detailed on page 1 of the RCA dated October 15, 2012 by category to facilitate additional City Council discussion.  Mr. Miller further noted the decision packages created by staff throughout the RCA in an effort to isolate those specific areas for City Council review; as well as additional information included from staff, as requested by individual Councilmembers at previous meetings, related to vehicle replacement policies of the Police and Public Works Departments.



Mr. Miller referenced three (3) bench handouts supplemental to preparation of the meeting packet and identified as follows:

·         August 27, 2012 Memorandum from Finance Director Miller entitled “Summary of City Cash Reserves” (Attachment G);

·         “Debt Service Payment Summary” for Series 23, 25, 27, 28 and 31 Bond Issues and debt service over the next twenty (20) years; and

·         January 6, 2011 Memorandum from Finance Director Miller entitled “Summary of City Cash Reserves.”


Regarding the process for bench handouts, Councilmember Willmus sought clarification, based on comments heard from residents, that they were updated online as supplemental to packet information and asked that they be included online as part of the record.


Mayor Roe concurred that this was a valid comment; and asked that staff ensure bench handouts were provided online for historical purposes; and suggested that they be clearly identified and classified as addenda, not part of the original packets, in order for the public to understand that the information was provided as supplemental to the meeting agenda packet materials.


Councilmember Willmus thanked staff for providing the debt service summaries; and sought clarification from Mr. Miller for the 2003 City Hall Bonds (Series 27) as to the call provision and any cost-savings if the bond issue was prepaid in the immediate future.  Specific to the rationale for his query, Councilmember Willmus noted the General Fund reserve position at year-end 2009 compared to year-end 2011, along with reserve fund target levels, and how healthy some of those reserves appeared to be.  Councilmember Willmus sought further information from Mr. Miller as to the proposed allocation for those reserves in the near future, especially those not designated in Enterprise Funds and at the City Council’s discretionary allotment; and whether staff had recommended purpose for those funds in the near future.


Mr. Miller advised that his response would vary depending on which specific reserve funds were being addressed.  Mr. Miller referenced his August 2012 memorandum, noting that the General Fund reserve target was currently 40%, with the City Council Policy outlining between 35-45%.  However, Mr. Miller noted that since the General Fund varied over the course of a year based on receipt semi-annually of property tax revenues from Ramsey County, as well as the reserve level growing with the General Fund annually as indicated, the amount of the reserve fund was ever changing.   Mr. Miller noted that, while the reserve level was funded at 40% on average in 2011, in 2013, that level dropped off considerably, and by 2014, trended below 40%, and would continue to systematically decline. 


At the request of Councilmember Willmus, Mr. Miller advised that he could only provide estimated year-end projections at this time with information available through September of 2012, indicating that it was trending close to projections and budget levels, with reserve levels remaining fairly consistent, and a potential small surplus in operating funds.


Councilmember Willmus asked that future staff presentations include identification of savings carried forward from 2011 to 2012; and projected savings from 2012 to 2013.  Councilmember Willmus advised that he needed to have a clear understanding of that data prior to his approval or denial of the Final 2013 Levy.


Mayor Roe clarified, and Councilmember Willmus confirmed, that he was seeking actual versus budget dollars annually. 


At the request of Mayor Roe as to how staff would provide that information, Mr. Miller advised that it would be presented in a format by fund similar to that included in page 2 of the RCA dated October 15, 2012.  Mayor Roe spoke in support of staff providing the information in that format.


At the request of Mayor Roe, Mr. Miller clarified that the target percentage for General Fund reserves would be based on the total General Fund budget, inclusive of all non-tax and tax-supported monies.  Mayor Roe clarified that his rationale in calling out the distinction of non-property tax funding was based on receipt semi-annually of property tax funds from Ramsey County.


Councilmember Johnson sought clarification on why the target reserve percentage in 2009 was at 50% and was now less, with Mr. Miller responding that this had been a City Council policy to reduce the reserve levels; but clarified that reserve balances were sufficient and allowed the City to remain in a good fiscal standing.  Mr. Miller, in response to Councilmember Johnson, advised that the reserve balance was captured at the end of the fiscal year, December 31st, and noted that it did fluctuate throughout the year based on receipt of semi-annual property tax payments.


In response to questions regarding the Communications Fund and healthy reserve levels at this time, Mr. Miller advised that, while they were strong now, revenue was through cable franchise fees, and there was a fair amount of uncertainty about whether or not those fees would be retained at the same level in the future, with renewal of the franchise agreement scheduled for 2014.  Mr. Miller advised that he could not, with any confidence, assure that fees would remain the same, and expressed his concern that revenues may decrease.  Admitting that current strong position of those reserves may not be needed, Mr. Miller opined that things could look drastically different in a few years.  Mr. Miller also clarified that those Communication Funds were legally restricted funds.


Mayor Roe clarified the restricted uses of those Communication Funds (e.g. cameras in City Hall, soundboards) and operational costs for the City’s newsletter and website.


Mr. Miller concurred with Mayor Roe, noting that the City should correlate those future needs with the twenty (20) year CIP to determine if the CIP was adequately funded or not.


At the request of Councilmember Pust, Mr. Miller confirmed that staff could be funded from the Communication Fund as long as they were performing communication-related work, no matter which department.


Regarding the License Center, Mr. Miller advised that reserves were in a strong financial position at this time; however, Mr. Miller noted that the intent was to keep the reserve level strong in anticipation of the potential future plan to house the License Center in a city-owned facility, requiring funds to construct such a facility or portion thereof; and when that occurred, those reserves would drop significantly.


Regarding the Water Fund, Mayor Roe noted that there was no reserve in place right now, and advised that, based on his discussions with Mr. Miller, he would address how the Water Fund related to the CIP in his presentation later tonight.  At this point, Mayor Roe noted that the intended transfer of funds into the Water Fund based on actions taken last year, had not happened to-date.


Mr. Miller concurred, noting that evaluation is ongoing as to whether to transfer funds from the Storm Sewer Fund to the Water Fund to boost the bottom line.


Mayor Roe noted that this was dependent on final costs yet to be determined for some projects, and also on whether capital project costs in the Water Fund would provide a better idea of how to get that fund back into the black.  Mayor Roe noted that the Water Fund as an Enterprise Fund indicated the need to segregate capital funding from operating funds; and asked Mr. Miller if a subfund underneath that broader fund could be created.


Mr. Miller responded affirmatively, if a cash flow could be equalized for monthly operational needs, and the rest designated for capital needs; opining that such an effort should not prove too onerous.


Mayor Roe suggested future budget cycles (2014/2015) consider such a designation.


Regarding Recycling, Councilmember Willmus sought clarification as to why there was a reserve fund for recycling, since the City’s monthly rate for residential recycling was similar to that of other communities; with a revenue sharing program also in place.  Councilmember Willmus questioned if the reserve account was being built from that revenue sharing or other sources.


Mr. Miller advised that the revenue sharing had generated the surplus; however, he noted the significant variables in that revenue sharing, with it almost disappearing in 2010; making the Recycling Fund susceptible to spikes – negative or positive – as well as a portion of its annual revenue funding source from the SCORE grant from Ramsey County of between $65,000 - $70,000, that was not a given either.


In response to Councilmember Willmus, Mr. Miller advised that the intended use of the reserve funds was to mitigate future rate increases, or revise types and/or frequencies of pick-ups.  Mr. Miller noted that the use of the reserves was at the discretion of the City Council and their preferred business model approach for this Enterprise Fund.


At the request of Councilmember Willmus, Mr. Miller advised that the recent rate increase with Eureka Recycling was not mitigated with reserve fund balances to reduce it, since most of the reserve was received in 2012.  Mr. Miller reiterated that, if the Fund took a hit from reduced SCORE grant funding from Ramsey County or revenue sharing was significantly reduced again, the surplus would go away as well.


In recognizing that the original intent of revenue sharing was to offset resident costs, Councilmember Willmus sought to make sure that was how it was being utilized.  Mr. Miller responded that it was; however, he clarified that the City did not know the amount of its revenue sharing annually; and suggested when the City Council took action to set its rates later this year, it should determine trends and set rates accordingly.


In response to Councilmember Willmus, Mr. Miller advised that, at the City Council’s discretion, revenue sharing projections and application could be used as a criterion in weighing and evaluating future RFP’s of potential vendors.


At the request of Councilmember McGehee, Mr. Miller provided projected impacts in 2013 for median value homes in Roseville and annual levies for average homeowners, compared with 2012 numbers.


Councilmember McGehee noted that there would be an increase for water utilities fees as well as an increased property tax levy.


Mr. Miller clarified that the utility fee increases were different for each utility (e.g. water, sewer, storm sewer), but that total for all three (3) in 2012 was $6.23 per month, and 2013 would be an additional $6.22 per month, as determined by the City Council to phase the rate increases in over two (2) years.


At the request of Councilmember McGehee, Mr. Miller advised that, if approved as recommended, the dollar impact for a typical median valued home in Roseville for the HRA levy would be an additional $1.28 per month.


Mayor Roe noted that the HRA tax impact on the average homeowner had not been very high in past years.


Councilmember McGehee advised that her intent was to provide information for homeowners on the median impact in dollar amounts versus percentage.  Councilmember McGehee noted the importance to recognize economic impacts to property owners over the last few years, as well as the drop in home values over that same time.


Based on the figures provided by Mr. Miller, Council member McGehee stated that the impact on the average home for 2013 was $12.68 per month or $152.16 per year.  The 2012 levy and fees resulted in $7.5 per month or $85.80 per year.

Thus the total increase for the average homeowner during this biennial budget cycle was $237.96.  She also noted that this amount will continue in the base going forward.


At the request of Councilmember McGehee, Mr. Miller advised that the average drop in home values, based on information from Ramsey County, was approximately 8-10% per year over the last two (2) years.


At the request of Councilmember McGehee, and as confirmed by Mayor Roe, Mr. Miller clarified that the loss of homestead credits had been factored into the numbers he had provided; and represented a net effect.


Councilmember McGehee noted the impacts to property owners with reduced home values if and when they attempted to sell their homes, as well as recognizing impacts for those who have lost their jobs or if fortunate enough to locate another job, finding the salary substantially lower.

Mayor Roe noted that the City Council was cognizant of those issues, even though many were out of its immediate control.  Council member McGehee agreed that many economic factors were out of the Council’s control, but felt it is necessary to be mindful of them when making our the Council’s own economic impacts on residents.


Referencing the October 15, 2012 RCA, Councilmember Pust addressed the proposed 15.8% levy increase for 2013, as itemized on page 1 of the RCA in fourteen (14) categories that would be added to the base budget for 2014 budget discussions, or $2.3 million.  Councilmember Pust sought clarification on those fourteen (14) categories, and which were actually specific to the base budget and which were one-time expenses and should therefore not be included in the base budget for future budget discussions.


Discussion ensued on those individual categories, with Mr. Miller clarifying that items (e.g. call volumes for Ramsey County Dispatch services; Fire Relief Pension obligations based on actuarial calculations; COLA); and other considerations and rationale for including those categories in the base budget.


Councilmember Pust opined that the City Council needed to further review the list to determine which items should remain on the base budget and which should be addressed in other funding categories as one-time expenses.  Examples provided by Councilmember Pust included the Compensation Study costs versus implementation of those results; and equipment replacement as it correlates with the CIP.  Councilmember Pust noted that this was her last opportunity to address the base adjustments and details for the record during her tenure on the City Council.


City Manager Malinen referenced pages 2-3 of the RCA and the decision packages provided by Finance Director Miller, and his subsequent review of each package on pages 3-4 of the RCA.  Mr. Malinen noted that many were part of the City Council’s budget process for 2013 and summarized each and their specifics.  As an example in response to Councilmember Pust’s concerns, Mr. Malinen advised that he and Mr. Miller always projected COLA at 2%, as had been done previously, and then agreements had been subsequently negotiated, with the 2013 budget amount reflecting those adjustments to the levy.


Mr. Miller concurred, noting that there was additional funding needed beyond the levy amount, reflected through 2012 turnover and hires at the lower end of the wage scale to replace retiring employees at the higher end of the wage scale, representing some savings in the base. 


Mr. Malinen reiterated that the percentage coming forward affecting the employee would be 2% projected, but that would not be 2% reflected over the current levy amount.


Councilmember Pust thanked Mr. Malinen and Mr. Miller for that clarification; however, she opined that if staff was spending captured salary savings and only building in 1%, they were not increasing the base.


Mr. Miller clarified that 1% was what was needed for 2013, based on an annual formula, with staff always asking for the net needed.


Mr. Malinen noted, with clarification by Mr. Miller, that those items were already part of the base moving forward into this projection and budget.


Councilmember Pust noted in the first biennial budget passed in 2011, 2013 health care premiums were unknown; however, she noted that they were now known.


Mayor Roe noted that the Cafeteria Plan for employees was passed at the previous City Council meeting.


Mr. Miller clarified that, getting back to the starting point and Preliminary Budget adopted by the City Council at their September 10, 2012 meeting, those projected healthcare premium increases were projected at $55,000, but had come in between $35,000 to $40,000.  However, Mr. Miller cautioned that the actual amount needed remained an unknown based on Open Enrollment and potential changes elected by employees moving from single to family coverage and/or new hires moving the range of coverage tiers, impacting that actual amount.  Therefore, Mr. Miller advised that, while not typically providing such a level of detail with the City Council, assumptions remained an inexact science to determine employee costs, and projected savings potential. 


Councilmember Pust recognized that concern, and therefore the need for reserves; however, opined that the City Council needed to continually remind itself that they aimed high to provide a cushion, but needed to consider how that cushion could and should be used.  While recognizing the challenge in projecting budget needs and revenue sources, Councilmember Pust noted that it was her job to ask the questions, but assured all that she appreciated Mr. Miller’s skill level and expertise, and asked that her questions and/or comments not be taken as criticism.


Mayor Roe noted that, with Open Enrollment completed before adoption of the final levy and budget, more firm information should be available before those decisions are made.


Mr. Miller noted that the City had experienced more operating deficits than surpluses in the General Fund over the last five (5) years; advising this prompted him to be more conservative when making presumptions and assumptions.


Councilmember Pust observed that this provided a good balance for Roseville residents; with Mayor Roe concurring, noting that staff and Councilmembers were all working toward the same goal.


Councilmember McGehee noted the need to have information available on impacts to taxpayers and answers to provide as to why their taxes were increasing.  Councilmember McGehee expressed frustration that the City’s infrastructure and CIP needs and maintenance had been deferred to now; however, she agreed with Mayor Roe and Mr. Miller that the City needed to get back to a sustainable condition.  Coming on the heels of other economic concerns, reduced market values, loss of homestead tax credits, and employment issues, Councilmember McGehee recognized the reality that everyone was facing.  While pointing out that a large number of Roseville seniors own their homes without a mortgage, Councilmember McGehee also recognized that many of those seniors were on fixed incomes.  While this was not the fault of the City Council, Councilmember McGehee recognized that the Council needed to remain cognizant of that fact.


Regarding the Communication Fund and an increase of $23,000 from 2011 to 2013 in personal services, City Manager Malinen advised that this was based on a reallocation of duties and reorganization within that area, and did not envision those numbers changing.


Councilmember Willmus advised that, moving forward, he would be looking for more detailed information related specifically to the Communication area.


Mayor Roe noted that the change from 2012 to 2013 was based on the recent time study allocation changes and refinements, in addition to changes in the election functions as well.


Capital Improvement Program (CIP) Subcommittee Report

On behalf of the CIP Subcommittee, consisting of Mayor Roe, Councilmember Johnson, City Manager Malinen, and Finance Director Miller, Mayor Roe referenced the Subcommittee’s Phase II Report dated September 10, 2012 and included as Attachment D to the RCA dated October 15, 2012.  Mayor Roe advised that he wanted to provide a brief refresher of 2012 CIP recommendations, and a more detailed review of the Subcommittee’s 2013 recommendations. 


Mayor Roe noted that the Subcommittee had looked at current situations for all funds, and then had provided their recommended solutions to specific funds and issues, incorporating planned expenditures for all areas and annual itemization and totals per category.  Mayor Roe reviewed the entire process, and the Subcommittee’s recommendation to provide a solution to make sure fund balances stayed positive, not negative, while those healthy balances provided funds to address annual costs, similar to what a bank would provide through an escrow balance for a home mortgage.


Mayor Roe noted that the first step had been taken in the 2012 budget, with significant cuts to the operating fund transferred to the CIP; in addition to added property tax funds to accomplish resulting fund balances that fluctuated annually in future budget years.


Mayor Roe updated the 2012 problem (page 5 of 10) and remaining unfunded items, represented by the rest of the solution and 2012 Subcommittee recommendations over the next eight (8) years and their proposed actions for City Council consideration.  Mayor Roe reviewed each category, and advised that the City Council look at the CIP during every biennium to ensure funds didn’t revert back into the negative again.


In pages 6-10, Mayor Roe reviewed each CIP Fund needing immediate attention over those first eight (8) years of the twenty (20) year CIP, including the Street Pavement Management Program (PMP); Park Facilities and Park Improvement Program (PIP); Skating Center Facilities; Information Technology (IT), Central Services and Administration; Pathways & Parking Lots PMP; and Street Light Replacement.  In attempting to stabilize those funds, Mayor Roe noted that recommendations included use of both existing tax levy amounts for current bonds when paid off, as well as new tax revenue, in some years for those most immediate needs; resulting in significant and sustainable solutions as outlined.


Discussion included parks and pathways operating and dedicated maintenance funds for Parks and Public Works areas; and annual adjustments to the twenty (20) year CIP as those annual operating costs came into play.


At the request of Councilmember McGehee, Mayor Roe noted that separation of funding between the Parks and Public Works Departments were fairly easy to track in the annual budget as separate categories broken out by program activity depending on how their roles were defined.  Mayor Roe clarified that this portion of the discussion was specific only to capital funding, not ongoing maintenance.


Streets PMP

Mayor Roe noted the significance and uniqueness of this fund, intended with annual projects to be funded from interest earned and those funds dictating street rehabilitation projects with the $12 million fund balance. However, Mayor Roe noted that at this time the needs were increasing faster than current interest rates could address; and the principle balance was being drawn due to those reduced interest rates and ongoing needs.  Mayor Roe noted the need for action soon, with the proposed solution detailed in the memorandum (page 6, lines 192-217).


Discussion included annual miles of projects that had remained consistent to-date, and pending Public Works, Environment, and Transportation Commission (PWETC) review and their subsequent recommendation as to annual miles to be considered and/or level of maintenance for the PMP Fund. 


Mayor Roe advised that the CIP Subcommittee’s solution was based on current mileage going forward over the next eight (8) years.


Councilmember Pust noted another option was to seek recommendation from the PWETC or policy discussion by the City Council on how much to recover through assessments. 

Mayor Roe noted that the PWETC had provided their recommendation through the recent Assessment Policy review and update adopted by the City Council resulting in a negligible impact to the CIP.


Councilmember Willmus noted that the discussion also addressed litigation issues in proving benefit to properties for reconstruction projects and whether assessments were justified based on the benefit of a mill and overlay to property value.


Parks Facilities and PIP (page 6, lines 220-238)

Mayor Roe reviewed the Subcommittee’s proposed solution, outside the separate New Pathways discussion; funding sources, repurposing, and stabilization.


At the request of Councilmember Willmus, Mayor Roe noted retirement of debt service earlier than projected could be repurposed for these needs, however, he advised that the solution was based on current schedules.


At the request of Councilmember McGehee, Mayor Roe advised that future fund balances would retain $2 million for maintenance as well as a cushion for unexpected projects; however, he noted that the 20 (20) year CIP could be fine-tuned periodically between now and 2030.


Skating Center Facilities (page 7, lines 241 – 260)

Mayor Roe summarized this category as detailed in the Memorandum, with no specific discussion related to it.


IT, Central Services and Administration (page 7, lines 263-281)

Mayor Roe noted these fund balances were addressed in the August 27, 2012 staff memorandum, as well as included in the September 10, 2012 packet materials as well.


Pathways & Parking Lots, PMP (page 8, lines 284 – 295)

Mayor Roe recognized that this much smaller deficit was easier to address as indicated for 2015.


Street Light Replacement (page 8, lines 298-306)

Mayor Roe opined that it made sense to provide a designated fund for these needs, with funding coming from the building replacement versus using General Fund reserves for that purpose.


Total Impact of the 2012 CIP Subcommittee Recommendations (page 9)

In conclusion, Mayor Roe referenced pages 9 and 10 of the Subcommittee report with their recommendations and total impact of the 2012 CIP Subcommittee Recommendations as detailed, with Table 1 on page 9 illustrating annual levy impacts between 2013 and 2012 independent of any other levy changes that may be required.


Additional Recommendations (Page 9, lines 320-332)

Mayor Roe advised that the CIP Subcommittee recommends that the proposed solutions, as outlined, be formally adopted by resolution, making it the policy of the city, incenting future city decision-makers to follow through on these critical funding plans.


Councilmember Pust opined that, with the exception of the most recent bond issues, she was proud of the steps taken by the City Council to address these issues and provide for a sustainable budget.  Councilmember Pust expressed her sincere appreciation to the CIP Subcommittee for their phenomenal work, and thanked Mayor Roe for his clear presentation tonight on behalf of the Subcommittee. 


In looking at the 2012 budget, Councilmember Pust recognized that the funding cuts to the operational budget were hard to do, but commended staff and the City Council for taking those steps; and going forward as they annually reviewed budgets, charged future City Councils and staff to review those operational expenses annually as well.  Councilmember Pust recognized that the City already ran very lean, but encouraged that periodic review as well.


While appreciating the City Council’s review of and consideration of repurposing levy funds, Councilmember Pust noted that the City Council needed to keep citizens updated on their intent; and noted that citizens, when asked if they were willing to have their taxes increased over a number of years, and assurances by the City Council that the bonds would be paid off and the additional taxes no longer needed within 15-25 years, any changes needed to be clearly defined for those citizens.  Councilmember Pust addressed the need for honesty with citizens, since this was not just new dollars; and she didn’t see any reduction or limit; and asked that those plans needed to be acknowledged to citizens.


Mayor Roe advised that his rationale for having this information presented and available to the public was to ensure they were aware of this important and recommended solution.


Councilmember Willmus sought clarification on impacts for the CIP funding to consistently be 1% annually, rather than higher and lower by a portion of a percentage, and whether that would provide any savings in the net levy. 


Mayor Roe noted that a percentage of 1.3% equaled $185,000 and the impact of a change to 1% could be calculated accordingly to determine impacts.


Councilmember Johnson noted that this was a delicate balance right now to replenish accounts in certain years based on projected needed in each category and provided by staff in their analysis of those needs.


Councilmember Willmus noted the amount of work done by the Subcommittee to phase levy impacts, and questioned if there was a way to further phase it.


Mayor Roe noted that there may certainly be a way to make adjustments on the levy in the future; and that this was intended to provide a framework going forward as a way to understand the numbers, but opined that there would always be an opportunity in the future for further refinement.


Councilmember Willmus noted his need to understand annual budget savings, and potential ways for reallocation or repurposing dollars to save levy dollars; and asked Mr. Miller to consider that request for information in upcoming weeks.


Councilmember Johnson noted that Mayor Roe had done an excellent job in outlining this very complex issue; and expressed his appreciation to Mayor Roe, City Manager Malinen and Finance Director Miller for their guidance and work on the Subcommittee process.  Councilmember Johnson also thanked Departments Heads for their honest assessments.  Now that the big picture was in place and if the City Council bought into the solutions as their philosophy going forward, Councilmember Johnson opined that it would provide a healthy situation.  Councilmember Johnson opined that it was important to have the CIP overall picture, with a 2-5 year outlook to refine it and identify increases; and noted that the funding as outlined in Table 1 represented critical times for each category.


Councilmember McGehee expressed her appreciation to the Subcommittee for their work as well; opining that they did a good job, and provided a clear and healthier way to move forward, and represented a path much more in line with her preferred philosophy.  Councilmember McGehee suggested that the City Council consider projecting biennial budgets as well, while recognizing that there was more fluidity for those situations.  Councilmember McGehee opined that this represented a better management process for the City’s budget and again thanked the Subcommittee for their work.


Recognizing Finance Director Miller for his initial recommendations for financial control policies, Councilmember Pust noted the success of those projected targets being set for reserve funds.  While noting that they sometimes changed, Councilmember Pust opined that they remained as a guiding framework and were accepted as true by the City Council.  Councilmember Pust supported adopting a formal policy as recommended to encourage future City Councils to retain this framework, while allowing for some flexibility, but still guiding future decision-making.  Councilmember Pust also asked that a way also be formalized for a review of each biennial cycle to determine if designated amounts had been spent, whether projections had proven high or low to actual expenditures and/or revenues; and that those be incorporated by Department Heads in their long-range planning, providing for continuing refinement based on those learning curves.


Mayor Roe concurred, noting the need to have more focus on the CIP annually during budget discussions and as part of the process moving forward, with feedback on previous biennial budgets on a staff level as well as from the public.


Councilmember Pust noted that this also provided Department Heads an opportunity to address best practices and vehicle replacement needs.


Additional Topic: New Pathway Construction (page 10, lines 335 – 346)

Councilmember McGehee noted her observations with recently installed and/or currently under construction pathways being used by the public, indicating how seriously people took those pathways and how important they were in their daily activities.


At Councilmember McGehee’s request, Mayor Roe advised that the public would be apprised of as much of this information as possible; and his supplemental presentation materials would be provided to staff to put online.


Mayor Roe suggested a CIP section be incorporated into the City’s website for easier access by the public.


14.      City Manager Future Agenda Review

City Manager Malinen reviewed upcoming agenda items.


Mr. Malinen noted that, at this time, it appears that the November 26, 2012 scheduled City Council meeting may not be necessary, and if no objections of the City Council, an action item on the November 19, 2012, agenda would include an item canceling that meeting; leaving two meetings remaining in December.


Discussion included legislative initiatives moved to 2013 as the new Council came on board; and upcoming reception for retiring Councilmembers Pust and Johnson.


Councilmember Willmus asked that the November 19, 2012, meeting provide additional time for budget discussions as a follow-up to tonight’s discussion and information requests.


i.        Councilmember-Initiated Items for Future Meetings

At the request of Councilmember Johnson, Mayor Roe advised that the next meeting would include a discussion about the form and process for the  City Manager’s annual review; followed by initiation of the  360 degree process; and results on November 19 or December 3.  Councilmember Johnson noted the need to schedule a Closed Executive Session at that time to discuss those results.


Councilmember Pust reminded Councilmembers that she would not be available to meet in November.


ii.        Adjourn

Johnson moved, Willmus seconded, adjournment of the meeting at approximately 9:34 pm.

Roll Call

Ayes: McGehee; Pust; Johnson; Willmus; and Roe.       

            Nays: None.